Terming Indian growth pattern as “impressive”, International Monetary Fund (IMF) has said it does not foresee overheating of its economy as long as current monetary policy is in place and its “independence is strengthened”.
“India’s growth has been impressive — 9.7 per cent in 2006, 8.9 per cent in 2007 and we are viewing at 8.4 per cent in 2008. That is really an impressive growth pattern,” IMF Managing Director Rodrigo de Rato said addressing a press conference here ahead of IMF and World Bank annual meeting.

Key priorities
Asked whether he saw any chance of Indian economy “overheating”, he explained, “We don’t see that if monetary policy continues to behave as is behaving right now and independence is strengthened in monetary policy.”

 “With inflation coming up a bit in 2007, we think monetary responses by Reserve Bank of India have been appropriate...”

Next priority
“ The credibility of monetary policy in India has become better and stronger and steps of liberalisation of financial markets of India are probably steps in the right direction.” The priorities for India down the road should be in keeping up with drive towards further liberalisation like bridging major gaps in infrastructure, addressing the labour shortages in skilled sector and opening up to foreign investment, he said.  There has been flexible movement of Indian currency which is “good” for the country, Mr de Rato said adding that confidence of investors in India is increasing.

GOOD GROUNDS FOR OPTIMISM
RBI gung-ho on growth stability
Mumbai, reuters: Reserve Bank of India sees reasons to be confident of maintaining present growth momentum with stability, Governor Yaga Venugopal Reddy said in a speech in London on Monday.

“There are grounds for optimism and these include democratic values, financial system stability, technological capabilities, large and growing entrepreneurial class, and penchant for innovation,” he said.  “The single most critical determining factor for future would, be improvements in governance that impacts personal security, property rights, business environment, and above all, a sense of fairness in the conduct of public policy.”